Despite success, Obama is blamed

By Heidi Przybyla and John McCormick BLOOMBERG NEWS

Saturday

Oct 30, 2010 at 12:19 AMOct 30, 2010 at 5:56 AM

The Obama administration cut taxes for middle-class Americans, expects to make a profit on the hundreds of billions of dollars spent to rescue Wall Street banks and has overseen an economy that has grown for the past five quarters.

Most voters don’t believe it.

A Bloomberg national poll conducted Oct. 24-26 finds that by a 2-1 margin, likely voters in the Nov. 2 midterm elections think taxes have gone up, the economy has shrunk, and the billions lent to banks as part of the Troubled Asset Relief Program won’t be recovered.

“The public view of the economy is at odds with the facts, and the blame has to go to the Democrats,” said J. Ann Selzer, president of Selzer & Co., a Des Moines, Iowa-based firm that conducted the survey. “It does not matter much if you make change, if you do not communicate change.”

The Obama administration has cut taxes — largely for the middle class — by $240 billion since taking office on Jan. 20, 2009. A program aimed at families earning less than $150,000 that was contained in the stimulus package lowered the burden for 95 percent of working Americans by $116 billion, or about $400 per year for individuals and $800 for married couples. Other measures include breaks for college education, moderate-income families and the unemployed and incentives to promote renewable energy.

Still, the poll shows the message hasn’t gotten through to Americans, especially middle-income voters. By 52 percent to 19 percent, likely voters say federal income taxes have gone up for the middle class in the past two years.

“He’s all about raising taxes,” says poll respondent Jeanette Bagley, 74, a retired home health aide in a suburb of St. Paul, Minn. “He’s all about big government and big spending.”

The view that taxes have gone up is shared by a majority of almost all demographic groups, including 50 percent of independent voters, among the linchpins of Obama’s victory in the 2008 election. Even a plurality of Democrats, 43 percent, holds this misperception. Overall, 63 percent of those who earn $25,000 to $49,999 say taxes have gone up, compared with 45 percent of those who earn $100,000 or more.

The poll demonstrates the tough odds for Democrats heading into the midterms. Republicans are poised to retake the U.S. House next week with a 47 percent to 44 percent edge among likely voters. Independents are driving the Republican advantage.

The heart of Obama’s voting base and the group he’s tailored most of his policies to, middle-income earners — or those who make $25,000 to $49,999 — feel more pinched by taxes, are gloomier about economic growth and more pessimistic the tax dollars lent to Wall Street banks will ever be repaid than their higher-income-earning counterparts.

In an October report to Congress, released as TARP turned two years old, the Treasury said it had recovered most of the $245 billion spent on the Wall Street bank part of the rescue, and expects to turn a $16 billion profit. In the Bloomberg poll, 60 percent of respondents say they believe most of the TARP money to the banks is lost and only 33 percent say most of the funds will be recovered.